CRJ-200 B/E Load Factor?

[Typhoon1244]

Three questions:

(1) Are labor costs factored in when calculating the break-even load factors for airliners?

(2a) If they're not, does anybody know what the CRJ-200's B/E load factor is?

(2b) If they are, does anybody know what ASA's CRJ-200 B/E load factor is?

 

[DirkkDiggler]

The break-even point will depend entirely on the ticket price. One passenger could be the break-even point if you charged them enough to cover the costs associated with flying that aircraft. In addition, the break-even point will be different for each airline as all companies have different overhead costs that will be factored into each departure. I'll bet even the head of accounting at your airline couldn't even give you a true answer to your question. It's far too complex.

 

[FDJ2]

Three questions:

(1) Are labor costs factored in when calculating the break-even load factors for airliners?

(2a) If they're not, does anybody know what the CRJ-200's B/E load factor is?

(2b) If they are, does anybody know what ASA's CRJ-200 B/E load factor is?

In the fee for departure world of the CRJ, with the notable exception of Indy, the load factor or passenger yield is irrelevant, since the carrier is compensated for the flight not by the passengers. IOW, the CRJ is profitable for the operator even if the load factor is 0%.

If you want to look at true CRJ economics in this environment check out the latest Indy SEC filing.

 

[Rogue5]

In the fee for departure world of the CRJ, with the notable exception of Indy, the load factor or passenger yield is irrelevant, since the carrier is compensated for the flight not by the passengers. IOW, the CRJ is profitable for the operator even if the load factor is 0%.

This twisted economic logic is absolute truth in the regional world, regardless of the aircraft being flown, and the inverse is true as well: We used to have a flight between two cities in California that went out full almost all the time in the Brasilia, and United pulled the flight because the market development gurus at UAL determined that most passengers were NOT connecting to mainline, and were in fact just using the flight to commute. Regional airlines exist to feed mainline, not to serve as a stand alone source of revenue (although Horizon come to mind as an exception).

Conversely, I can't tell you how many times we pleaded with our dispatchers to cancel our FAT-VIS-FAT trip (maybe 30 min block roundtrip) because it was empty both ways and we coud save money for us and UAL (and the crew would get to go home a little early or get a later show). The answer was always the same: We get paid if and only if its flown...

 

[chperplt]

Freddy boom boom told us in the crew room one night that the fee for departure structure at Delta will be gone pretty soon. Connection carriers are going to have to actually run their airlines like airlines to make money.

Time will tell..

 

[tranceport]

I believe SKYW b/e is something like 67%. I'd bet ASA is similar (if it were run with terms that are similar: pay/costs).

 

[AutoBus]

Three questions:

(1) Are labor costs factored in when calculating the break-even load factors for airliners?

(2a) If they're not, does anybody know what the CRJ-200's B/E load factor is?

(2b) If they are, does anybody know what ASA's CRJ-200 B/E load factor is?

That really depends on the operation, but in today's yield/fuel price market it must be around a 135% B/E load factor. Sure most RJ operators say they are profitable, but they are getting a fixed price check everytime the aircraft leave the gate. Also most take no risk on the price of fuel because the major partner usually provides it as part of the contract.

In general (although there are a few exceptions) the 50 seat RJ is a bad deal all around and explains why there is no growth in that fleet size. Even Canadair did not expect the RJ feeding frenzy of the 1990's, the RJ was a last ditch effort to make a few bucks on a dying corporate jet model.

In general, I understand the average RJ cost to be about 17 cents (including fuel) per ASM, so a way to figure cost is .17 * 50 * segment length. so a 250 mile segment it would be about $2125 plus landing and handling fees, maybe a total trip cost of $2500.

So if your incremental revenue per seat is at least $50 (after taxes, fees, tsa etc) you might be making money with a full plane. Keep in mind that's incremental revenue (if big bucks airlines charges $129 to go from DAB to LAS via ATL) may only be 20 or 25 bucks (based on distance) so while the RJ operator is making money (he get's a fixed check everytime) the major partner is losing money (the situation we have today)

There is a very limited market for point to point (hub bypass) RJ service where is can make money, but that market is very small.

If I had to guess, you will see MUCH less small RJ flying in the coming years, a small increase in large RJ flying (the economics are better). This is a double edged sword for the RJ operators because as the aircraft get larger it makes it cost effective for the major partner to operate that size equipment (or slightly larger) itself. Some markets will see a return to big turbo-prop flying (Dash 8 300's and 400's, ATR 42 and 72's). Aircraft like the Beech 1900's, Jetstreams, Etc are a basket case when it comes to costs per ASM (in the 29 cent range) so you'll see most of that flying disappear. Smaller cities will lose service.


This is not really answering your question, but it might provide you with some insight on airline economics.

 

[DirkkDiggler]

In general, I understand the average RJ cost to be about 17 cents (including fuel) per ASM, so a way to figure cost is .17 * 50 * segment length. so a 250 mile segment it would be about $2125 plus landing and handling fees, maybe a total trip cost of $2500.

That only provides the cost of operating that one aircraft on one leg. It doesn't consider the overhead necessary to run an airline. (Cost of buildings, salaries of executives, marketing, training, etc.) All these costs have to be figured into the equation if you want to know what the break-even point is for an aircraft at a particular airline. The aircraft doesn't fly and the airline doesn't exist without all this background support.

 

[DoinTime]

In addition to everything posted above stage length is a very important factor in determining a specific CASM for a given flight. An airline may run a CASM of $0.25 on a 100 mile but these costs drop to $0.10 on a 1000 mile flight.

 

[Indypilot]

That only provides the cost of operating that one aircraft on one leg. It doesn't consider the overhead necessary to run an airline. (Cost of buildings, salaries of executives, marketing, training, etc.) All these costs have to be figured into the equation if you want to know what the break-even point is for an aircraft at a particular airline. The aircraft doesn't fly and the airline doesn't exist without all this background support.

Autobus and dirk,

if your CASM is .17, that includes everything you have mentioned above. CASM=Cost Per Available Seat Mile= Total Cost/Available Seat Miles= ALL costs (Including landing fees, marketing, buildings etc.)

Just remember it is an average. While your actual costs on one leg might be higher or lower, CASM is an AVERAGE. BELF happens when CASM=RASM, So going back to algebra class, you can just right well take out the ASM part and make the equation C=R. It is helpful to add the ASM part in to see how certain tweeks would change the equation.

As for the o/p question, yes crew costs are counted in the equation, and ASA's BELF is actually negative under a FPD contract. (Don't ask how it's possible to get a negative LF because its not possible, you just gotta love FPD economics) Now if you wanted a guess on what Delta's BELF is for ASA, my guess is its around 80%.